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Tim Culpan

Alibaba Shows How Tough It Is to Kick a Habit

Attempts to diversify away from e-commerce are so far failing, and there’s no indication they’ll bear fruit anytime soon.

It’s failed to follow the trend.

It’s failed to follow the trend.

Photographer: Qilai Shen/Bloomberg

Slowing growth and a rise in corporate spending have spurred global technology companies to boost revenue from non-consumer offerings. Apple Inc., Microsoft Corp., Inc. and Taiwan Semiconductor Manufacturing Co. are among those who’ve built solid business models around the rise in cloud services. Alibaba Group Holding Ltd. has failed to follow the trend, and looks unlikely to do so anytime soon.

Despite billions of dollars and years of investment into cloud, logistics, and digital media and entertainment, the Chinese tech giant remains entirely reliant on its 20-year-old business model of e-commerce marketing and sales. While management is adept at extracting money from selling goods, it’s yet to work out how to reproduce that success in online services.